Carnival Is Upping Its Ad Spending to Drive More Cruise Bookings

Hannah Sampson, Skift

- Jul 05, 2017 1:30 am

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Carnival Corp. said its cruise lines have made a case for additional advertising and marketing dollars to generate more bookings — and the parent company is listening. Now we wait to find out how that money gets spent and what kind of results they will see.

— Hannah Sampson

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Consumers in the United States and Europe should expect to see more messaging from Carnival Corp. this year.

Executives revealed in an earnings call in late June that Carnival, the world’s largest cruise operator, plans to increase its spending on advertising and marketing during the fourth fiscal quarter, which ends Nov. 30.

“We have increased our full year cost guidance slightly to reflect additional investments to be made later this year as our brands have identified further revenue-generating opportunities,” CEO Arnold Donald told analysts. “As we have indicated before, we will continue to invest in opportunities we see that drive revenue and return on invested capital over time.”

The company didn’t specify how much more it will dole out or how exactly it plans to spend the money, but based on last year’s spending and the projected increase, the additional investment will likely be somewhere around $40 million.

The news came during a fairly positive quarter: Revenues and ticket prices in most parts of the world have been higher year-over-year, though China has continued to struggle.

Chief financial officer David Bernstein said additional money will go toward “our four proprietary television programs, as well as advertising efforts to continue to optimize booking momentum for 2018 and beyond.”

Carnival launched original TV shows last year and now has programs that run Saturday mornings on A&E Network, ABC stations, NBC stations, and The CW stations. The shows highlight cocktails, adventure travel, offbeat discoveries, and family stories, all through a lens of cruising.

Additional marketing for individual brands is also in the plan, the company said. Carnival owns brands including Carnival Cruise Line, Princess Cruises, Holland America Line, Seabourn, AIDA Cruises, Costa Cruises, and P&O Cruises. Donald said the focus will be on core markets in Europe and the U.S.

“The brands are all reviewing their forward plans,” Donald said. “They want to maintain the momentum they’re enjoying, and we’re getting smarter and smarter about how to invest dollars.”

He said there would be some investment in “onboard efforts” on some ships as well.

Donald said that as the company has sought to save $75 million a year in costs, some of that money has gone to the bottom line and some has been reinvested.

“Right now, the brands have put forth some pretty convincing arguments of additional revenue improvement by making investments, so we’re doing it,” he said. “But we’ll be revealing that as we go. I wouldn’t consider it a pattern or projection for what we’re going to always do….But in this particular case, with the specific proposals they presented, with the evidence they put with it, it seems like a smart investment to make.”

Photo Credit: Carnival Corp. plans to increase its spending on advertising and marketing this year, including on some of its original programs. Shown here is a scene from "Ocean Treks with Jeff Corwin." Carnival Corp.